Fruit, vegetable export value up in H1

Vietnam gained a 33 percent year-on-year increase in the fruit and vegetable export value to reach 1.17 billion USD for the first half of 2016, officials said.

This was mainly due to higher demand in China’s market, said the Vietnam Fruit and Vegetables Association.

According to the General Department of Customs, China was the largest export market for Vietnam’s fruit and vegetables, accounting for 70 percent of the national export volume of these products in the first five months of the year.

The total export value of local fruit and vegetable products reached year-on-year growth of 80 percent, touching 692 million USD in the first five months, the department said.

The United States was the largest export market for local fruit, with a year-on-year increase in export value of 62 percent to reach 37 million USD.

The Republic of Korea was the third-largest export market, with year-on-year growth of 25.7 percent to reach 35.4 million USD.

In the first half of this year, Vietnam exported 4,608 tonnes of fresh fruit to fiercely competitive markets such as the United States, Japan, the Republic of Korea, New Zealand and Australia, of which 72 percent was dragon fruit.

In the future, dragon fruit exports are expected to increase even further because such exports from Vietnam to Taiwan will recover after the latter’s block on fruit imports is lifted. Taiwan plans to import 14,000-16,000 tonnes of dragon fruit per year.

Vietnam expects to make 2 billion USD on fruit and vegetable exports this year because the nation may enter three more competitive markets, Japan, the European Union and the United States, according to the association.

Last year, Vietnam’s fruit and vegetable export value reached 1.8 billion USD, 23.7 percent higher than 2014, making it one of the top five farming export products in Vietnam, alongside rice, coffee, cashew nuts and rubber.

Vietnamese fruit and vegetable products have been exported to 40 countries and territories. Of these, major export markets include mainland China, Japan, the United States and Russia, in addition to the Republic of Korea, Indonesia and the Netherlands. The other countries are Thailand and Singapore.

SSC focuses on bond market

The State Securities Commission of Vietnam (SSC) was actively implementing the corporate bond scheme to make the local corporate bond market work next year, said SSC’s Deputy Chairman Nguyen Thi Lien Hoa.

Hoa made the remarks while attending an evaluation meeting for bond markets in the first half of 2016 in Hanoi, adding that over the next six months, the SSC would issue relevant decrees to develop the market as well as a legal framework for developing credit qualified rating units for corporate bonds.

Finance and banking expert Nguyen Tri Hieu said the active participation of enterprises and credit institutions would motivate the market. To promote the development of the corporate bonds market, Hieu said, Vietnam needed reputable credit rating firms as well as better transparency of financial statements.

Hieu added as corporate bonds had a certain level of risk, the risks could only be stated out loud with reputable credit rating organisations or the bond market would remain sluggish.

Chief Executive Officer of OCB, Nguyen Dinh Tung said with corporate bonds, transparent information played an important role for the development of the market as it was the basic knowledge from the issuers that investors can rely on for their investments.

According to the Hanoi Stock Exchange (HNX), the local corporate bond market has experienced remarkable development. By 2015, the market size was estimated at more than 42.7 trillion VND (1.9 billion USD). Six years ago, the market size was recorded at 30 trillion VND.

However, the development of the corporate bond market is still slow. It now accounts for 2.5 percent of GDP. Compared to the average ratio of 21.7 percent of GDP in ASEAN+3 countries, it is still too low. Among regional countries with the highest rates as of June, 2014, corporate bonds value reached 16.78 percent of GDP in Japan, 74.76 percent in the Republic of Korea and 42.29 percent in Malaysia.

Also at the meeting, HNX said the fact that 99 percent of corporate bonds were privately placed contributed to the slow development of the market, as investors did not have the opportunities to buy the bonds.

The private placement of corporate bond in the US was 12 percent while the rate in Germany was 10 percent and in the Republic of Korea it was 0.4-15 percent.

Tong Minh Tuan from Vietcombank Securities Company’s HCM City branch, said that private issuance was good for the local market at these early stages of the market, especially as there wasn’t a rating unit for the market yet. Tuan added that buyers of bonds must be responsible for rating the issuers to best protect their property, thus, they should have the most accurate assessment of the capacity and confidence of the issuers.

Tuan also said the issuance of corporate bonds could help corporations to create capital for their development, especially in merger and acquisition (M&A) activities that require a large amount of money all at one time. M&A continues to be a hot trend with no sign of slowing down in Vietnam.

Tuan said while Circular No. 36 of the State Bank of Vietnam did not allow banks to buy bonds to fund M&A activities, it did not prohibit funds and securities companies investing in the field. Thus, Tuan said, "The corporate bond market will continue to grow strongly."

Vietnamese firms must target retail effort

Vietnam’s retail market is promising, but local businesses must strengthen operations in order to compete with international investors right in the home market, experts said during a workshop in HCM City on July 1.

Nguyen Anh Duc, Deputy General Director of Saigon Co-op, said the Vietnamese retail market has for long interested international investors, especially after the country joined the World Trade Organisation.

“The participation of international investors in the retail market has promoted the growth of Vietnamese enterprises,” he said.

However, Van Duc Muoi, General Director of the food processing company Vissan, said that for a long time many local businesses believed they only needed to make high-quality products for customers to buy.

But they should also realise that distribution is one of the most important aspects for every business. “Sales will decide output and business activities,” he said.

Truong Phu Chien, general director of the candy firm Bibica, said: “If a company wants to survive and develop, it must have its own retail channel.

“Besides supermarkets and convenience stores, Vietnamese enterprises should develop more retail channels like restaurants.”

Nguyen Phu Hoa, Deputy Director of the Ministry of Industry and Trade’s import-export department, said: “the business community should think about setting up a retail system for the whole world, not only Vietnam, with technology and new sale models.

“Vietnamese retail businesses like Saigon Co-op should have applications for smartphones because today the whole world is in your hand with smartphones,” Hòa said.

Ten years ago, Vietnam had 368 supermarket outlets, and now the number is 800.

The number is expected to reach 1,200–1,500 by 2020, along with 180 trade centres and 150 shopping malls, workshop participants were told.

Saudi Aramco withdraws from $22 billion Vietnam project

Saudi Arabian Oil Company (Saudi Aramco) has decided to withdraw from the development of the $22 billion Victory Nhon Hoi refinery and petrochemical complex in the south-central coastal province of Binh Dinh, along with Thailand's largest energy company PTT Public Company Limited (PTT), according to newswire ICIS.com.

According to a source from PTT, the reason for Saudi Aramco’s withdrawal is that the two investors have yet to find a suitable Vietnamese company to partner with for the project.

In spite of Saudi Aramco’s withdrawal, PTT still considers Vietnam as a strategic investment location and will continue to develop the project by transferring it to IRPC, a 38.5 per cent PTT-owned company.

“As a shareholder, PTT will support IRPC in determining the project’s size, the scope of necessary investment as well as finding potential partners,” the PTT source said.

However, the date to start construction has yet to be set because in late June PTT postponed plans due to the uncertainty of the global oil market.

According to Nguyen Ngoc Toan, deputy director of the Nhon Hoi Economic Zone Management Authority, along with the uncertainty of the global oil market, the company has yet to complete the project study as well as dossiers for the investment certificate. It will delay the project and review the investment plan at the end of the year.

In 2014, PTT and Saudi Aramco agreed to hold 40 per cent each in the project. Besides, the two investors wanted a Vietnamese partner to take part in the joint venture, as was mentioned earlier by PTT.

The Thai firm proposed partnering up with state-run Vietnam National Petroleum Group (Petrolimex) and held working sessions with provincial authorities and Petrolimex representatives, but eventually failed.

While PTT confirmed that a local partner was not an essential condition for its investment, Saudi Aramco insisted on a Vietnamese enterprise involved in the project. This is one of the reasons for the investors’ delay in application for an investment certificate.

German investors choosing Danang

German ASEAN Power and Marquardt Group are planning to develop costly projects in the central city of Danang to tap into the local improved business climate.

Last week, German ASEAN Power talked with the local authorities on the possibilities of investing in a solar power project in the city.

“Vietnam is a prioritised market for our development strategy over the next five years. With improved infrastructure and a growing energy demand, Danang is a suitable location for the project,” said Moritz Sticher, general director of the German firm.

“A group from our firm will visit Danang in late July 2016 to study the location. We plan to invest $400 million in this solar power project with a capacity of 400megawatts, with a first phase target of 20-100MW. We will use local contractors to transfer technology to the city,” he noted.

On the same day, a group from Marquardt Group led by vice president in Asia Ludger Schoenecker, studied the local investment climate for its new project, which is part of its future business expansion.

“We are seeking a location in Vietnam to build a plant manufacturing hi-tech products used in the automotive industry, among others. Danang is a potential location for this, with the first phase costing EUR35 million ($38.86 million),” he added.

“The city made a strong impression on us with its professional working style and foreign direct investment attraction strategy and its focus on high-tech and environmentally-friendly sectors. We hope to develop the project in the coming time,” he noted.

As a leading manufacturer of electro-mechanical and electronic switching systems for automobiles and other sectors, Marquardt has plants in 14 countries worldwide. Some famous clients include Mercedes Benz, BMW, Volkswagen and General Motors. In 2015, Marquardt Group’s revenue reached EUR1 billion.

Tran Van Mien, Deputy Chairman of the Danang  People’s Committee, supported these investment plans, affirming that Danang had magnificent supporting policies and would always create favourable conditions for investors to the city.

The plans are a good sign for Danang, which saw a sluggish influx of foreign direct investment (FDI) last year. It ranked 33rd among 63 cities and provinces nationwide in terms of attracting FDI. Currently, South Korea and Japan are the biggest foreign investors in Danang. The city’s FDI ranking did not improve in the first six months of 2016, when Danang dropped to 53rd. This is despite the central city’s good investment environment and a high Provincial Competitive Index (PCI) rating for three recent consecutive years.  

The local authorities earlier blamed the situation on a lack of cleared land and a higher land rental rates than other central neighbouring  provinces.

In a move to promote investment inflows to the city, on June 24, Danang’s leaders held a meeting with more than 200 from over 17,000 firms operating in the city.

Huynh Duc Tho, Chairman of the Danang People’s Committee, emphasised that the city would continue to simplify administrative procedures to create a healthy business climate for businesses.

Vicem IPO now set for Q4

The Vietnam Cement Industry Corporation (Vicem) is expected to conduct its initial IPO in the fourth quarter of this year instead of the second quarter, as originally planned.

Sources close to Vicem and the Ministry of Construction (MoC), under which Vicem falls, said the State-owned corporation “has been working hard to conduct its IPO later, in the fourth quarter of 2016.”

Formerly known as the Union of Cement Plants, Vicem was founded in April 1980. The corporation mainly operates in the cement production and distribution sector, with a total capacity of 20 million tons of cement a year.

It accounts for up to 34 per cent of Vietnam’s cement output and has prestigious brands in all three regions of Vietnam, such as Hoang Thach in the north and Ha Tien in the south.

The delay in the IPO stems from the corporation acquiring Cement Ha Long and Cement Song Thao in March this year. Both companies have recorded poor performance in recent times, lacking financial capacity and accruing major debts, according to MoC.

Cement Ha Long’s losses at the time of acquisition were over VND3 trillion ($136.4 million) while Cement Song Thao’s were VND500 billion ($22.7 million).

According to Stoxplus, a stock research agency, the acquisition of the loss-making companies dampened the appeal of Vicem’s IPO and resulted in difficulties in its valuation. Foreign investors from Thailand and Indonesia had been interested in the IPO but the excess supply in Vietnam’s cement market has seen them hesitate.

Cement Ha Long reported total revenue of VND1 trillion ($45.5 million) for the first five months of this year. Cement and clinker totaled 831,000 tons, up 21 per cent compared to the same period of 2015.

“This was the result of contributions from Vicem along with affiliate companies in helping Cement Ha Long survive through hard times,” Vicem CEO Tran Viet Thang was quoted as saying. Vicem is addressing the existing problems at Cement Ha Long, after which the corporation can undergo a valuation for equitization, he added.

Vicem recorded total revenue of VND32.6 trillion ($1.48 billion) in 2015, double the figure in 2014, according to its 2015 financial report. Pre-tax profit for 2015 was VND3 trillion ($136 million), also double the result in 2014.

Vicem has eight affiliates: Vicem Hai Phong, Vicem Hoang Mai, Vicem Ha Tien, Vicem Bim Son, Vicem Hoang Thach, Vicem But Son, Vicem Hai Van and Vicem Tam Diep. Five of the eight have undergone equitization and changed to joint stock companies: Vicem Hoang Mai, Vicem Bim Son, Vicem Hai Van, Vicem But Son and Vicem Ha Tien.

There are more than 62 companies with approximately 100 plants - full-cycle factories and grinding stations - in Vietnam’s cement market.

LafargeHolcim may withdraw from Vietnam due to the oversupply of cement in the domestic market. The largest multinational cement producing company in the world by installed capacity, LafargeHolcim is present in 90 countries and focuses on manufacturing cement, aggregates, and concrete.

Along with Vicem’s IPO, MoC is also planning to conduct an IPO for other State-owned giants under its management, such as the Song Da Corporation (SDC), the Housing and Urban Development Corporation (HUD), and the Urban and Industrial Zone Development Investment Corporation (IDICO).

Industrial park rent averages US$115 per square meter in HCMC

Land hiring demand at industrial parks in the southern region has been on the rise with rent averaging US$63.3 per square meters.

HCMC takes the lead with the price of US$115.2 per square meter thanks to developed infrastructures. The rent swings US$40-70 per square in neighboring provinces.

The southeastern region is home to about 100 industrial parks and export processing zones, mainly concentrating in Dong Nai and Binh Duong provinces.

The occupancy rate at these parks and zones is 74 percent, equivalent to 18,000 hectares out of the total of 24,255 hectares for rent.

VFA cuts 2016 rice export forecast

The Vietnam Food Association (VFA) has adjusted down the 2016 rice export forecast by about 800,000 tons to 5.7 million tons.

VFA chairman Huynh The Nang said VFA member companies have reported a steady decline in rice shipments due to fewer export orders, including government-to-government contracts.

Nang said demand of China has inched down but has remained high. Every year, the northern neighbor buys half of Vietnam’s total rice export volume.

Statistics of the Ministry of Agriculture and Rural Development showed domestic exporters shipped abroad 2.69 million tons of rice worth US$1.21 billion in the first half, down 9.8% and 5.9% year-on-year respectively.

Nang said rice exports are predicted to grow in the rest of the year, hopefully driven by big orders from the Philippines and Indonesia.

On the local market, rice and paddy prices have bounced back after they dipped to the lowest this year two weeks ago. IR50404 paddy harvested by combine harvesters is sold at VND4,250-4,450 per kilogram in the Mekong Delta compared to VND3,900-4,000 per kilogram two weeks ago.

Unprocessed rice retails for VND6,350-6,500 per kilogram at Ba Dac wholesale market in Cai Be District in the Mekong Delta province of Tien Giang Province, up VND350-400 per kilogram.

Nang ascribed the increasing prices to higher quality and lower post-harvest losses.

Jan-May tra fish exports up

Vietnam exported US$650.3 million worth of tra (pangasius) fish in the first five months of this year, a 5.5% year-on-year rise, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

The U.S. remained Vietnam’s biggest importer of tra fish in the period with US$152 million, rising by 12.9% over the same period last year and accounting for 23.4% of the total. Meanwhile, exports to China edged up 72.7% to US$94.9 million and shipments to Brazil reached US$32.8 million, leaping 118.3% year-on-year.

Local tra fish firms saw the U.S.’s anti-dumping duties and catfish inspections as barriers to tra fish exports to the choosy market.

The U.S. Department of Commerce (DOC) publicized the final results of the eleventh Period of Administrative Review (POR11) for tra and basa fish products imported from Vietnam from August 1, 2013 to July 31, 2014 in end-March.

Accordingly, two compulsory defendants are imposed an anti-dumping duty of US$0.41 and US$0.97 per kilo respectively while 14 voluntary defendants are subject to a duty of US$0.69 per kilo. No anti-dumping duties are slapped on Vinh Hoan and Bien Dong companies as they actively took part in relevant inspections.

In the year to May, tra fish exports to Europe had declined 8.1% to US$109.3 million. Particularly, exports to the U.K. and the Netherlands fell by 3.4% and 20.8% respectively while shipments to Germany rose by 1.8% and Spain by 1.9%.

Drought, salination hurt economic growth in H1

The Ministry of Planning and Investment said in a report that drought, saltwater intrusion and environmental pollution hit Vietnam’s economic growth in the first half of this year.

The report on socio-economic performance in January-June was presented at a monthly cabinet meeting of the Government in Hanoi last week.

Minister of Planning and Investment Nguyen Chi Dung told the meeting that Vietnam’s gross domestic product (GDP) grew 5.55% in the second quarter, up from 5.48% in quarter one.

However, GDP growth cooled to 5.52% in the first six months of this year. The agro-aqua-forestry sector edged down 0.18%, while the manufacturing and construction sectors reported respective pickups of 7.12% and 6.35%.

According to the ministry, the construction sector in the period rose by 8.8%, the highest in six years. However, a slump of the agro-aqua-forestry sector, triggered by drought, salination and environmental pollution, left strong impacts on the country’s social-economic performance in the first six months.   

Prime Minister Nguyen Xuan Phuc said that to achieve 6.7% GDP growth as set by the National Assembly, different scenarios must be worked out to actively cope.

Borrowers to face more interest rate risks next year

When the 2015 Civil Code takes effect from early 2017, borrowers will face more interest rate risks if disputes with lenders erupt.

The risks were mentioned at a meeting on credit disputes organized in HCMC last week by the Vietnam International Arbitration Center (VIAC) and the Vietnam Banks Association (VNBA).

VIAC arbitrator Do Van Dai said the 2005 Civil Code stipulates that when there is a lawsuit involving the borrower and the lender, the court would allow the lender to apply a normal annual interest rate of 13.5% and 20.25% for overdue loans regardless of the interest rates agreed upon between the two parties.

In reality, some courts could accept the interest rates agreed upon between the borrower and the lender since the loan agreement is voluntarily signed by the two sides.

The 2015 Civil Code regulates that when a credit institution files a lawsuit against its borrower, the interest rate would remain unchanged before and after the trial and will be the same as those agreed upon by the two sides provided that the contract interest rates are legal and not higher than permitted.

According to the 2015 Civil Code, the interest rate ceiling for loans is 20% per year.

VIAC arbitrator Truong Thanh Duc said if the highest rate of 20% applies, banks could impose an interest rate of up to 30% per year for overdue loans. If courts accept the current high interest rate of up to 70% per year as agreed upon between financial companies and borrowers, the interest rate for overdue loans could exceed 100%.

Dai said the new rules would put borrowers at risk because the interest could be charged continuously until all loans are settled. Meanwhile, under the current rules, courts usually allow the interest on loans to be put on hold when a court hearing begins and only interest payment would resume after a verdict comes out.

Duc said not only borrowers but also credit institutions are also at risk under the 2015 Civil Code as some regulations are unclear, so they could be interpreted differently by the parties involved.

Credit grows 6.82% in H1

Credit inched up 6.82% in the first six months of this year against the end of 2015, above 6.37% in the same period last year, showed data of the Credit Department under the State Bank of Vietnam.

Loans in the Vietnam dong had jumped 8.11% as of June 24 over end-2015 and picked up 22.95% versus the first six months of 2015. It accounted for 90.8% of total outstanding loans, while foreign currency credit edged down 4.64% against end-2015.

Nguyen Tien Dong, head of the department, was quoted by the Vietnam News Agency as saying that the credit growth matched the nation’s macro-economic performance in the period and the central bank’s fight against dollar hoarding. Higher credit growth supported business operations.   

Dong said more loans went to the manufacturing sector and the five priority sectors of agriculture and rural development, production of export goods, small- and medium-sized enterprises (SMEs), supporting industries and high-tech enterprises.

Outstanding loans for SMEs surpassed VND1,029 trillion (US$46.17 billion) in the January-June period, up 2.62% against last year’s end and accounting for 20.1% of the total.

The agricultural and rural development sector saw outstanding loans from credit institutions, excluding Vietnam Bank for Social Policies and Vietnam Development Bank, reaching around VND886 trillion, increasing 4.98% from late 2015 and making up some 18% of the total.

Regarding the five priority sectors, credit expanded by 5.53% to some VND183.42 trillion for production of export goods, 2.37% to VND121.53 trillion for supporting industries, and 1.45% to VND28.62 trillion for hi-tech enterprises.

The central bank projected credit would rise by 18-20% this year and said it would make adjustments to support gross domestic product (GDP) to grow 6.7% as set by the National Assembly.

Six years see per capita income leaping 73% in HCMC

HCMC has made considerable headway over the past 40 years with its average income per capita having surged 73% since 2010 to US$5,538 a year, said Dinh La Thang, secretary of the city’s Party Committee.

At a ceremony held on Saturday to mark the 40th anniversary of the city being named after President Ho Chi Minh (July 2, 1976), Thang said the city had made great achievements over the years.

The size of the city’s economy has over the past four decades expanded from a mere VND2.5 billion to the current VND957 trillion (around US$43 billion). The average housing area per person in HCMC has risen to 17.32 square meters from 8.9 square meters in 1977 while the city’s population has surged to over 8.2 million from 3.4 million in 1976.

The city has narrowed the income gap among groups of residents from ten times in 1992 to 6.6 times in 2014 and the gap in living standards between urban and rural areas from 1.8 times in 2008 to 1.2 times in 2014. As of last month, the households with annual income lower than VND21 million per person had accounted for 3.32%.

Speaking at the ceremony, State President Tran Dai Quang called on the city to enhance the efficiency of governance, persistently implement breakthrough solutions to achieve fast yet sustainable economic growth, increase growth quality and competitiveness, boost infrastructure development, improve the quality of life and step up international cooperation.

Firms say hard to sell goods via traditional channels

Domestic goods producers have shared the same view that it is difficult and costly to sell goods at traditional shops and markets as more consumers are used to do the shopping at modern stores.

At a seminar on solutions for retail enterprises in HCMC last week, many domestic goods producers said they had difficulty supplying goods for supermarkets and other modern stores, especially those foreign-invested, due to dire conditions.

To reduce heavy dependence on supermarkets and commercial centers of foreign firms, domestic producers are advised to focus on the traditional channel which now makes up 75% of domestic retail sales and is dominated by domestic enterprises.

Take Vissan as an example. The country’s leading local meat processing company had around 1,000 outlets nationwide in 2010 but its sales still stagnated. Therefore, Vissan has restructured the distribution system and invested heavily in 130,000 points of sale across the country.

However, it is tough to build a traditional distribution system, especially for small and medium enterprises, deputy general director of Saigon Food Le Thi Thanh Lam.

Saigon Food has concentrated on the domestic market over the past 13 years. However, this channel is not sufficient for it to boost sales so it has had to rely on the modern retail channel.

“To increase our domestic market share, we have invested much in the traditional channel,” Lam said.

Industrial production growth drops off

Viet Nam's index of industrial production (IIP) saw a low growth rate of 7.5 per cent in the first half of the year, the General Statistics Office (GSO) has said.

The growth rate was much lower than the 9.7 per cent registered in the same period last year.

The GSO said the sharp decrease in the IIP was due to the mineral sector which saw a sixth consecutive drop in as many months. The sector's IIP witnessed a decrease of 2.2 per cent in the first half of the year while prices of minerals, crude oil, coal and other materials reduced sharply.

However, the main reason for the drop in growth of the sector was the decreasing crude oil output in the six-month period.

Processing and manufacturing rose 10 per cent, while electricity production and distribution rose 11.7 per cent, and water supply and waste treatment rose 8.1 per cent.

In June alone, the IIP rose 7.4 per cent from last year, in which, the mineral sector saw reduction in growth by 6.1 per cent, while manufacturing and processing, and water supply and waste treatment, rose 11.3 per cent and 7.6 per cent, respectively.

Some industries reported higher IIP in the six-month period in comparison to the corresponding period last year. These included metal production at 19.7 per cent, electronics and computers at 17.9 per cent, and automated vehicles at 15.3 per cent.

Accordingly, in the first half, some industrial products were estimated to register high growth. These were television sets by 69.9 per cent, automobiles by 27.2 per cent, rolled steel by 22.7 per cent, and steel bars at 22.1 per cent, in addition to cement at 17.7 per cent.

The northern Thai Nguyen Province has shown the highest IIP growth rate in the period with 40.3 per cent, followed by Quang Nam Province at 35.8 per cent. Trailing them were Can Tho City at 24.6 per cent, Hai Phong City at 16.9 per cent, Bac Ninh Province at 13.5 per cent, and Da Nang City with 11.1 per cent, in addition to Binh Duong Province with 8.4 per cent, Hai Duong Province with 8.2 per cent, Dong Nai Province with 7.9 per cent and Ha Noi with 7.4 per cent.

The consumption of the manufacturing and processing sector in May rose 5.2 per cent from the previous month, 7.8 per cent higher than the same period last year.

In the first five months of the year, the consumption in this sector posted an 8.8 per cent year-on-year rise.

Other sectors also saw higher consumption from the corresponding period last year such as electronics and computers at 15.2 per cent, vehicles at 14.2 per cent, and metals at 13.7 per cent.

GSO's statistics revealed that the inventory index of the processing and manufacturing sector in the last six months rose 9 per cent from the same period last year.

Some sectors showed higher inventory indices than the common level, including vehicles at 115.3 per cent, electronics and computer production at 69.6 per cent, and paper products at 33.4 per cent.

Tra fish to be traded online

Tra fish will be traded online from the end of this month, making the trading more transparent, according to the Viet Nam Pangasius Association.

The association's deputy general secretary, Vo Thi Thanh Huong, said a Swiss organisation has helped set up online trading platforms at www.mekongfishmarket.com and www.pangasiusmap.com.

They would be launched by the end of this month, and through them pangasius exporters can sell their products globally, she said.

While www.mekongfishmarket.com would contain news about the association's 50 members and their products, www.pangasiusmap.com would carry information about the farming areas and the standards they meet, she said.

Information about each of the more than 1,100 ponds with a combined area of around 12.3 million square metres will be regularly updated.

Nguyen Ngoc Hai, chairman of the Thoi An Pangasius Co-operative based in Can Tho, said the websites would be of great support to the tra industry.

Farmers can get up-to-date information about the market and fish and feed prices, he said.

To help the online market work efficiently, the association wants a logistics network developed.

Once the network comes into being, all tra fish products would be standardised, Huong said.

Produce export value up in 2016

Viet Nam gained a 33 per cent year-on-year increase in the fruit and vegetable export value to reach US$1.17 billion for the first half of 2016, officials said.

This was mainly due to higher demand in China's market, said the Viet Nam Fruit and Vegetables Association.

According to the General Department of Customs, China was the largest export market for Viet Nam's fruit and vegetables, accounting for 70 per cent of the national export volume of these products in the first five months of the year.

The total export value of local fruit and vegetable products reached year-on-year growth of 80 per cent, touching $692 million in the first five months, the department said.

The United States was the largest export market for local fruit, with a year-on-year increase in export value of 62 per cent to reach $37 million.

South Korea was the third-largest export market, with year-on-year growth of 25.7 per cent to reach $35.4 million.

In the first half of this year, Viet Nam exported 4,608 tonnes of fresh fruit to fiercely competitive markets such as the United States, Japan, South Korea, New Zealand and Australia, of which 72 per cent was dragon fruit.

In the future, dragon fruit exports are expected to increase even further because such exports from Viet Nam to Taiwan will recover after the latter's block on fruit imports is lifted. Taiwan plans to import 14,000-16,000 tonnes of dragon fruit per year.

Viet Nam expects to make $2 billion on fruit and vegetable exports this year because the nation may enter three more competitive markets, Japan, the European Union and the United States, according to the association.

Last year, Viet Nam's fruit and vegetable export value reached $1.8 billion, 23.7 per cent higher than 2014, making it one of the top five farming export products in Viet Nam, alongside rice, coffee, cashew nuts and rubber.

Vietnamese fruit and vegetable products have been exported to 40 countries and territories. Of these, major export markets include mainland China, Japan, the United States and Russia, in addition to South Korea, Indonesia and the Netherlands. The other countries are Thailand and Singapore.

Hai Duong Province firm lists in HCM City

Hai Duong-based HCD Investment Producing and Trading Joint Stock Company on July 4 listed 13.5 million shares on the HCM City Stock Exchange at a reference price of VND12,900 each.

Founded in 2011 the company, formerly known as HCD Metallurgy Joint Stock Company, specialises in the import and export of PE, PP, HD, LD, LLD, PS plastic resins and trading in construction materials like iron, steel, and industrial limestone.

In the first quarter of this year its sales topped VND78.3 billion (US$3.5 million). Its after-tax profit was VND4.7 billion ($210,762), or 53 per cent of the full-year profit in 2015.

Plastic resin sales have been robust in recent years.

According to experts, the plastics industry is one of the fastest growing in Viet Nam, expanding annually at 16-18 per cent in recent years.

Stocks of plastic industry firms are among investors' favourites.

Vietnam enjoys trade surplus in six months

The country’s imports-exports in June are estimated at US$29.7 billion, of which exports are US$14.8 billion and imports are US$14.9 billion, according to the General Department of Vietnam Customs.

Thus, total imports-exports in the first 6 months of this year hit US$162.95, a year-on-year increase of 2.6%. Of the figure, exports rose by 5.9% to US$82.24 billion while imports dipped 0.5% to US$80.71 billion, resulting in trade surplus of US$1.53 billion.

Exports of key products grew compared to the same period last year, typically, telephones and components (up 16.7% to US$17.05 billion), garment (up 5.1% to US$10.72 billion), computers, electronics and components (up 7.1% to US$7.88 billion), footwear (up 8.8% to US$6.35 billion), machines, equipment and tools (up 15.9% to US$4.39 billion), wood and wood products (up 1.6% to US$3.22 billion) and seafood (up 4.4% to US$3.08 billion).

Hau Giang Pharma sells 24.4 per cent stake to Japanese enterprise

Japanese Taisho Pharmaceutical Co., Ltd. (Taisho) spent $100 million on buying a 24.4 per cent stake owned by 34 foreign shareholders in Hau Giang Pharmaceutical JSC (DHG), according to information published by Vietnam Securities Depository (VSD).

Notably, Taisho has bought more than 21.3 million DHG shares at the unit price of VND100,000 ($4.48).

After the sale, Taisho became the second largest shareholder in DHG, following State Capital Investment Corporation (SCIC), which owns 43.3 per cent.

Some large foreign enterprises divesting DHG are Vinacapital, Dragon Capital, Fullerton, Nikko New Age Asia Equity, and Mekong Portfolio Investment Limited, among others.

Taisho Vietnam Co., Ltd., which is a subsidiary of Taisho Pharmaceutical Holdings Co., Ltd., set up with the initial investment capital of $18 million. The company specialises in manufacturing beverages, such as its key product Lipovitan Honey energy drink.

Vietnam’s biggest publicly-traded drug maker, DHG specialises in manufacturing and trading pharmaceuticals, functional food products, and cosmetics.

As of 2015, DHG ranked among the top five largest domestic drug makers in Vietnam. DHG’s products made up 5 per cent of the Vietnamese pharmaceutical industry and accounted for 11 per cent of domestic enterprises’ market share.

As of the first quarter of 2016, the company has an asset of over VND3.4 trillion ($152.4 million) and a net revenue of VND815 billion ($36.5 million) in the first three months of 2016. This year, the company plans to reach VND679 billion ($30.4 million) in profit, up 14 per cent on-year.

The Vietnamese pharmaceutical market has become attractive in foreign investors’ eyes, thanks to a dynamically growing population of more than 90 million and the signing of several landmark free trade agreements (FTAs).

While Vietnam’s third-largest domestic drug maker Domesco has agreed to remove the foreign ownership limit, DHG still keeps it unchanged at 49 per cent.

Hoang Nguyen Hoc, chairman of DHG’s Board of Directors, said at the recent annual shareholders’ meeting that “Pharma is a sensitive industry. Although the government allows foreign investors to hold over 49 per cent chartered capital of a domestic pharma firm, it still lacks detailed guidelines for the issue. Therefore, the board would take no further steps at the moment.”

Shakeup needed to promote exports to US: Minister

Vietnamese exporters need a revolution to promote shipments to the fastidious US market, said Minister of Industry and Trade Tran Tuan Anh.

Vietnamese enterprises should develop a food safety system to ensure high-quality products, Anh noted, adding that consultancy organisations should be established to support businesses in completing relevant exporting process and procedures.

In a bid to get a foothold in the market, Vietnamese exporters must better their understanding of US partners, regulations and business practices, the minister highlighted.

Statistics from the Ministry of Industry and Trade (MoIT) revealed that two-way trade in the first five months of this year hit 17.8 billion USD, with 14.6 billion USD from Vietnam’s exports. As of May, the US was the 8 th largest investor of Vietnam with 809 valid projects valued at 10.8 billion USD.

Although robust growth has been seen in Vietnam’s exports to the US in the past years, experts said that Vietnamese exporters have not fully benefited from the trade expansion due to fierce competition, trade barriers and enterprises’ shortcomings.

According to Nguyen Duy Khien, Director of the MoIT’s American Market Department, the US has applied safeguard measures to imports, including Vietnamese farmed fish.

Vietnam’s aquatic product shipments to the US have experienced a substantial fall from 2015 as a result of the US Department of Agriculture’s catfish programme, posing great challenges to Vietnamese exporters.

Regarding other exports, Khien said that to increase Vietnamese product access to the American market, exporters must build their own brand names while ensuring sufficient supply to meet customers’ demand.

Meanwhile, Do Kim Lang, Deputy Director General of the Vietnam Trade Promotion Agency, underscored that it is significant for Vietnamese exporters to deepen their knowledge about food safety and regulations to enter the US market.

Former technical expert of the US Food and Drug Administration (FDA)’s Foreign Facility Registration Verification Programme David Lennarz pointed out other difficulties facing Vietnamese enterprises. He said that anti-terrorism measures such as the container security initiative and regulations on food and drug processing facility registration will increase export costs for Vietnamese enterprises.

Revenue from Vietnamese exports to the US is expected to shoot up in the coming time thanks to high demands and opportunities brought about by global integration. However, Vietnamese exporters need to overcome trade barriers like food hygiene and registration procedures.

Vietnamese firms must target retail effort

Vietnam’s retail market is promising, but local businesses must strengthen operations in order to compete with international investors right in the home market, experts said during a workshop in HCM City on July 1.

Nguyen Anh Duc, Deputy General Director of Saigon Co-op, said the Vietnamese retail market has for long interested international investors, especially after the country joined the World Trade Organisation.

“The participation of international investors in the retail market has promoted the growth of Vietnamese enterprises,” he said.

However, Van Duc Muoi, General Director of the food processing company Vissan, said that for a long time many local businesses believed they only needed to make high-quality products for customers to buy.

But they should also realise that distribution is one of the most important aspects for every business. “Sales will decide output and business activities,” he said.

Truong Phu Chien, general director of the candy firm Bibica, said: “If a company wants to survive and develop, it must have its own retail channel.

“Besides supermarkets and convenience stores, Vietnamese enterprises should develop more retail channels like restaurants.”

Nguyen Phu Hoa, Deputy Director of the Ministry of Industry and Trade’s import-export department, said: “the business community should think about setting up a retail system for the whole world, not only Vietnam, with technology and new sale models.

“Vietnamese retail businesses like Saigon Co-op should have applications for smartphones because today the whole world is in your hand with smartphones,” Hòa said.

Ten years ago, Vietnam had 368 supermarket outlets, and now the number is 800.

The number is expected to reach 1,200–1,500 by 2020, along with 180 trade centres and 150 shopping malls, workshop participants were told.

Property market recovering: forum

The property market will continue recovering but experts told an online forum held by Dau Tu (Investment) newspaper recently that they do not expect breakthroughs in the second half of this year.

According to Tran Du Lich, a member of the National Monetary Policy Advisory Council, the market will not see significant developments in the remaining months of the year.

Lich expects the development of housing projects for low-income earners will improve in 2017, driven by the Government’s efforts to develop social housing projects.

He said it was necessary to warn about imbalanced development of the property market as there was abundant supply in the high-end segment but a shortage in projects for low-income earners. This must be given special attention, especially if banking credits continue to be poured into the high-end segment.

“If banking credits target housing development for low-income earners, we will not have to be worried much about a property bubble,” he said.

Vu Van Phan, Deputy Director of the Ministry of Construction’s Housing and Real Estate Market Department, said the ministry would check housing project plans nation-wide to decide whether they should be implemented or not in order to ensure a supply and demand balance, as, in fact, there might be an excess in the supply at the high end over demand.

According to Le Hoang Chau, Chairman of the HCM City Real Estate Association, although the market is on a recovery path, there are potential risks requiring developers to pay greater attention to affordable projects. Home buyers should also carefully check out the projects and developers’ capacity before buying.

The recovery of the property market will moderate in the second half of this year, Duong Thuy Dung, head of CBRE Vietnam’s Research and Consulting Department, said, adding that the market will see new sales but at similar rates to last year.

Minister urges acceleration of public investment disbursement

Minister of Planning and Investment Nguyen Chi Dung said that the ministry has proposed the Government issue a resolution on accelerating the disbursement of public investment capital.

The move aims to resolve obstacles and speed up the disbursement for projects in the National Target Programme (NTP) that have not been allocated public investment capital in 2016.

According to Dung, the draft resolution allows capital arrangement in 2016 for projects in the NTP and those benefiting from the Government’s Decree 210 on encouraging enterprises to invest in agriculture and rural development, projects using government bonds, a programme on solidifying schools and kindergartens in districts, and transport projects using the remaining capital from the National Roads 1A and 14 projects.

This year’s capital is also arranged for special projects with their investment decisions approved after March 31, 2016.

According to Dung, as of June 29, the ministry received reports from 53 out of the 56 ministries and central agencies and all the 63 cities and provinces on the progress of public investment capital disbursement.

Reports showed in the first five months of 2016, disbursement of State budget capital reached over 81.8 trillion VND (3.6 billion USD), equal to 32.6 percent of the target, while that of Government bond capital was more than 6.9 trillion VND or 18 percent of the goal.

Official development assistance (ODA), preferential loans and non-refundable aid the country has signed since 1993 totalled 75.7 billion USD, of which 22.6 billion USD needs to be disbursed in the coming time.

Approximate 21 billion USD in ODA and preferential loans is expected to be disbursed during 2016-2020, including 4.75 billion USD planned for this year. However, only 1.85 billion USD was disbursed in the first half of 2016.

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